Questioning if a Company Really is “Sustainable”

The following post is part of the course work for “Live Exchange” the foundational course on communication for The MBA Design Strategy Program at California College of the Arts. The rest of the posts are presented here.

By Nicholas Vieira

We hear the word “sustainability” everywhere these days. Sustainable development seems to be the key to saving our world from the dark future that our past actions doomed us to. Widely described as “the development that meets the needs of the present without compromising the ability of future generations to meet their own needs”, according to the Brundtland Comission of the United Nations, we know that a lot more has to happen in order to achieve that goal.

Being sustainable today means acting on three major points to change your business: economic, social and ecological. Rethinking these three points is essential for guaranteeing the preservation of human life for a long period of time. The idea is great, but not that simple to be implemented. Changing the business model requires a paradigm shift which can be painful and, at first sight, unprofitable. Acquiring a green seal on a product has, however, become a “must have” for every company that wants to show to their clients that they care about their future. Those products have become desirable and consumers are willing to pay more for the benefit. The advertisement is used in many cases as “greenwashing” – a term adopted by environmentalists to refer to corporate propaganda that tries to mask a weak environmental performance of companies that are deceiving consumers with fake advertisements. Therefore the question that we should be asking is: are those businesses really sustainable?

Usually it’s easy to verify the company’s actions by checking its production process and market performance. The way that they interact with the environment where factories are located and how they extract raw material used during production is also an important point to consider when analyzing the impacts. Besides that, the companies also have to develop their business in a socially fair manner and be committed to human integrity. They need to also contribute with action that encourage and support the local culture in a way that every citizen can have access and enjoy it in an equal basis.

In 2010, a research done by TerraChoice Environmental Marketing, a company specialized in consultancy of development of sustainable products and repositioning of companies in the market, assessed the reliability of more than 5,200 products claimed to have sustainable differentials inside department stores in America and Canada. The result was shocking. The majority of 95.5% of the samples examined had fake advertise or at least it was dubious. But that number was even higher in 2007, totalizing the amount of 99%. The same study also shows that “greener” product offerings had grown 79% from 2008 to 2009, and 73% from 2009 to 2010. (The Sins of Greenwashing – Home and Family Edition, 2010 by TerraChoice)

In Brazil (my home country) I’ve seen large banks advertising themselves as been sustainable business, but I’ve always ask myself until what point are they really being sustainable? How can a bank have a sustainable business model if they charge sky-high interest for the money they lend, besides depriving lots of people from its use? Then you can say that they invest in social-cultural and ecological projects but at the end they don’t achieve the requirements to be a truly sustainable company, that’s what we have to pay attention for. According to an analysis done by IDEC (Brazilian Institute for Consumer Protection), the Brazilian banks were evaluated in a scale of 1 to 5 points, in which none of them reached 3 points, with an average of only 2 points. Besides the poor score, IDEC also highlights the problem with the communication channels between the bank and the client, which doesn’t always work satisfactorily (www.idec.org.br). Minus one point on social inclusion for them!

Therefore, companies should be more responsible when publicizing such statements but only us, as consumers, are able to decide how far they can go playing this game when we purchase their products. Certifications like the Green Seal (www.greenseal.org) can really help identify those truly committed business by setting high standards of sustainability. The seal is attested by a non-profit organization dedicated to promote products and services that are environmentally responsible by analyzing several aspects including transparency and accountability at the corporate level and scientific life-cycle assessments on key product lines. There website also holds a list of the companies and products that have already been certified, making it easy to know who they are. Forbes, the well known leading source for reliable business news and financial information, also holds a raking of the world’s most sustainable companies on their website.

For us, as a consumer society, we will try to carry our flag with actions and sustainable practices in our every day life always thinking about reducing our impact on the environment. Companies are realizing they need to start changing their business models and provide products and services that are more beneficial to us and for our society in a long time period. Sustainability has become a trend which everybody wants to follow, but not everyone is willing embrace the cause. Got keep our eyes open and do our part.